According to the BBC, Fidayeen-e-Islam, a relatively obscure Pakistani militant group, claimed responsibility for the blast. The attack follows a threat from the Taliban made on May 27, warning of "major attacks" in Pakistan.

The bombing occurred despite the property being heavily guarded and secure. The militants gained entrance by overcoming the guards with gunfire, and forcing a bomb-laden truck, containing at least 500 kilograms of explosives, through the gates. Police official Liaqat Ali told the Associated Press that the militants "drove the vehicle inside the hotel gates and blew it up on reaching close to the hotel building."

The bomb caused a 15-foot wide crater, and brought down the west wing of the hotel. An injured guest, Jawad Chaudhry, said, "The floor under my feet shook. I thought the roof was falling on me. I ran out. I saw everybody running in panic. There was blood and pieces of glass everywhere."

The hotel is regularly used by businessmen and diplomats, and is located in a secure area of the city. Neighbours include the Peshawar High Court, Provincial Assembly and the official home of the Commander of the Frontier Corps. The perceived security of the neighbourhood makes it a candidate for the location of a planned United States consulate.